US Treasury Secretary Robert Rubin recently repeated his accusation that the economic crisis and sharp plunge of currency in Asia, Rusia aand Latin America were due to the economic weaknesses of these countries and not the fault of hedge funds and currency speculators.  His logic is if a country is economically sound, these speculators would not be able to attact its currency (but which country does not have economic problems).

When Rubin first said this in October 1997 in defence of his country's hedge fund bosses who were criticised by Prime Minister Datuk Seri Dr. Mahathir Mohamad, we thought that was natural as the crisis did not affect America's economy.  But for him to say the same thing again and again recently in Davos, Switzerland, in front of many heads of state and ministers from countries which had been ravaged by these speculators, it was obvious that his unwavering support for the hedge fund bosses arose mainly due to his Wall Street background as he is a good friend of many of these bosses.

Rubin's protective attitude only serves to encourage these speculators to be more blatant as evidenced by their saying openly they would attack Hong Kong again after they failed in August last year.  The sharp depreciation of currencies against the US dollar has resulted in American goods becoming very expensive and caused a substantial decrease in the import of US products by these countries while export to America has increased rapidly.

It is alarming to see America incurring a trade deficit of over US$200 bil in 1998, and few expect the deficit to come down below this gigantic amount in the next few years.  By the year end, America will have at least US$1 tril in foreign debts and it would cost them over US$60 bil just to service these foreign debts each year.

The hedge funds might have made a few billions of dollars in profit from attacking the currencies of these countries, but it is the US government which is paying a heavy price in the form of huge trade deficit and foreign debts.  Therefore, it is necessary for America to take the lead to impose certain controls on currecny trading (such limiting the selling of a currency at a maximum of US$1 mil per client per day by any bank, unless it is for legitimate business purposes).

No one could say such a control would restrain free trade, which ought to be in goods, but not currencies.  As for countries which might be the likely target of attack by these speculators, they should all get ready to impose selective capital controls and follow the model of Malaysia, which has shown such action to be highly effective.  These countries should not make the same mistakes as Brazil did recently.  After losing US$40 bil in foreign reserve, the Brazilian real still went down by 40 % within three weeks.

Many Brazilians are now destitute.  With interest rate at about 50 %, many more businesses are expected to fold up and millions will lose their jobs.  Does that sounds familiar?  Yes, it happened in Asia recently as a result of the standard medicine prescribed by IMF.

For the sake of human rights ( the rights to bare living for many Asians, Russians and South Americans), would Rubin please step down.  This is because your protective attitude towards the hedge fund bosses has made them even more daring and greedy, without any fear or consideration for the millions who suffer greatly through no fault of their own.

Alternatively, you could do something to control these senseless speculators and ensure that the world economy would not be jeopardised by them.